MEDIA; MTV Paying $160 Million For a 'Virtual Pets' Site

Published: June 21, 2005

The MTV Networks unit of Viacom Inc. said yesterday that it had bought the closely held Neopets Inc. for $160 million, adding the youth-oriented Web site to a children's programming lineup that includes SpongeBob SquarePants and Rugrats.

Neopets.com lets users create ''virtual pets'' and receives more than five billion page views a month, Viacom said in a statement. The chief executive of Neopets, Doug Dohring, and other senior managers will stay on after the purchase, which closed yesterday.

Viacom, the third-biggest American media company, is adding Web content as it plans to split into two next year. The purchase will help Viacom expand its merchandising business, the MTV Networks vice chairman, Herb Scannell, said in an interview.

Peter Jankovskis, director of research at Oakbrook Investments, which owns Viacom shares, said: ''Kids have always been important to the MTV division. The split of the company accentuates that.''

Neopets.com was founded by two British college students, Adam Powell and Donna Williams, in 1999, according to the company's Web site, and now operates in 10 languages.

Site users, who ''adopt'' pets that live in a world called Neopia, play interactive games, exchange messages and submit stories, poems and comics. The Warner Brothers unit of Time Warner Inc. is developing a Neopets movie based on the creatures, which are cartoon animals with special powers and habits.

''We have the ability to create properties with their own hero and villain characters that can be merchandised,'' Mr. Dohring said. About 141 million Neopets have been created, he said.

The company, which brings in most of its revenue through advertising, employs about 120 people and is profitable, Mr. Dohring said.

About 39 percent of the site's users are younger than 13 and 40 percent are 13 to 17 years old, Neopets said, citing Media Metrix data. About 57 percent are female and users spend about 6 hours and 15 minutes on the site a month, Neopets said.

Photo: A screen from the Neopets site, where users can adopt characters.